European Stocks Gain on Greek Deal Optimism

February 8, 2012 4:23 AM EST

European stocks opened on a positive note Wednesday, following gains on Wall Street overnight and in Asia on reports that Greece was close to reaching an agreement needed to qualify for a second bailout.

The Stoxx Europe 600 Index gained 0.49 percent to 264.85. DAX30 advanced 61.11 points or 0.9 percent to 6,815.31, CAC 40 rose 23.38 points or 0.69 percent to 3,434.92 and the FTSE 100 advanced 21.17 points or 0.36 percent to 5,911.43.

Banking and mining shares led the rally with Credit Agricole SA gaining more than 3 percent and Societe Generale SA gained more than 2 percent, while BNP Paribas SA advanced 2.88 percent.

"Optimism about finalizing the prolonged Greek debts deal boosted sentiment overnight as Greek officials said that the final draft of agreement between the Greek government and international creditors is in progress," said a note from Credit Agricole Research.

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Greek Prime Minister Papademos is scheduled to meet with Troika and the domestic parties' leaders late Wednesday.

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On the macro front, Germany is set to auction its 5-year Federal Notes due Feb 2017 later Wednesday in an issue size of EUR4bn could have some market impact.

Crude oil futures gained 0.98 percent to $99.37/barrel and gold futures rose 0.18 percent.

On the forex front, the GBP gained 0.18 percent to 1.5924 against the dollar and the euro gained 0.17 percent to 1.3282 against the greenback.

"GBP's recovery from its lows around 1.5233 on 13 January has been impressive and it has outperformed the EUR and expects this to continue, while GBP gains against USD will be limited ahead of the BoE meeting Thursday," said analysts' at Credit Agricole.

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